October 11, 2018 / 5:48 AM / 2 months ago

IMF's Lagarde urges countries to control 'inevitable' capital outflows amid trade, rate risks

IMF Managing Director Christine Lagarde speaks during International Monetary Fund - World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 11, 2018. REUTERS/Johannes P. Christo

NUSA DUA, Indonesia (Reuters) - International Monetary Fund’s Managing Director Christine Lagarde on Thursday urged countries to “use all the tools” to resist the consequences of inevitable capital outflows, amid trade and interest rate risks.

Lagarde said these outflows of capitals are inevitable as the world braces for impacts from trade frictions and as major central banks in the West turn to a tightening cycle.

She recommended more flexibility on capital flow management, adding that some emerging markets, including South East Asian countries, have been reluctant to ramp up such controls in the belief that they should only be used in exceptional circumstances.

Reporting by Yawen Chen; Editing by Shri Navaratnam

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